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The CIO–CFO Debate: Mid-Air Collision?

8th July 2013

When it comes to guarding against IT breakdowns, both the CIO and the CFO tend to be typecast into ‘innovator’ and ‘naysayer’ categories, respectively. But cloud computing and virtualisation technologies coupled with security concerns should drive more collaboration across these roles.

Successfully managing an IT strategy is no simple task, particularly in today’s environment where business partners, employees and consumers all expect 24/7 availability of operations and resources. You only need to look at the myriad of high profile outages that plagued certain companies over the last few years to see the damage that can be done when operations and service fail.

Worryingly, however, our Available Enterprise research of 450 senior IT decision-makers across the UK, France and the Nordics, revealed that a staggering 80% of organisations lack the right skills and resources to completely manage availability effectively. Furthermore, those organisations that fail to recognise the link between enterprise availability and customer satisfaction will ultimately lose customers, significantly harming revenues and profitability.

CIOs in particular are calling out for more support from the board and senior management, to help them overcome this. With finance increasingly involved in sanctioning expenditure, this article will examine whether the relationship between CIOs and CFOs is a healthy one, or one that’s holding up innovation and development within organisations.

Innovator vs. cost-cutter

Steve Lea, our CFO, states that CIOs are seen as only being interested in innovation and new technologies, with the financial implications largely an afterthought. The CFO is not overtly opposed to the introduction of new technologies, for example, but has to view any investment from the perspective of the company’s bottom line.

Dave Gilpin, our CIO, maintains that the responsibility of the CIO is to take a visionary approach – to overlook immediate, potentially minor merits in favour of longer-term, more substantial business investment. Gilpin also admits that CIOs can thrive on the glory associated with driving innovation – of sourcing and investing in something that brings about major change to an organisation, and being seen as the one person taking the business in exciting new directions. It’s a different mindset than that of the CFO, one traditionally driven by the less high-profile, ongoing ambition to manage costs and keep a healthy financial bottom line. His view is that this can cause friction with the CFO’s continual focus on delivering more immediate cost savings.

However, the prospect of delivering 24/7 availability across an organisation, and the required investment in support of this, is surely something that CFOs and CIOs could both get behind. Cloud computing, virtualisation technologies and managed recovery programmes are the starting points for this, bringing with them the flexibility and scalability to help manage company resources and data, and deliver them to employees, regardless of time or location. They also bring with them implications for both the CFO and CIO – in terms of the supporting finance models and new possibilities they allow with regards to company information.

How the cloud changes the CFO-CIO dynamic

Perhaps the reason for disparity stems from the apparent confusion over who is driving priority issues like the adoption of availability within the organisation. Our research found that almost one-third (32%) of IT decision-makers see it as part of the CEO’s role – although this rose to 41% in the UK compared with 21% in France and 23% in the Nordics – and a similar proportion (31%) felt it is the job of the CIO. Just one-fifth felt it was the responsibility of the CFO (18%) or COO (18%). In the past, a CFO may have been able to admire a shiny new server or row of gleaming laptops in a contact centre. Nowadays there is often nothing tangible to show for their investment. Interestingly, among Nordics respondents there was almost a four-way split, suggesting senior management is expected to take a more collaborative approach on strategic issues.

This supports research we’ve done in the past that suggests the priorities of CIOs and CFOs are not so clear cut. Perhaps as a result of pressure from the CFOs, our research reveals that many CIOs do have cost-cutting in mind from the outset, and that reducing expenses is 1 of the 3 most pressing challenges they feel need resolving. Feedback from CFO respondents, meanwhile, undermines the perception of them as solely worrying about financial aspects of investment. Ensuring data is secure is paramount; in fact 3 times as many CFOs are looking for “a solid record of resilience and protecting of a customer’s data” rather than “impressive ROI” stats when selecting a technology provider.

With this in mind, what is needed is two-fold. First, it’s up to vendors to get under the skin of organisations and work closely with them to understand the exact technologies that companies should adopt, on a case-by-case basis. What’s crucial is that technology, like cloud computing (be it private cloud, managed private cloud, public cloud or a hybrid thereof), is positioned with a legitimate business case so that it becomes a strategic decision, rather than simply an IT one.

Second, greater communication is needed between CIOs and CFOs, as well as with their peers. Any distinctions that currently exist between them are changing by the day. With ‘as-a-Service’ solutions changing how we consume and finance technology, the priorities of CIOs and CFOs will continue to overlap to deliver the greater goal of a modern Available Enterprise – one where its people, data and processes, and the infrastructure that connects them, are all accessible as required to support the business and the ‘all-time’ requirements today’s society places upon technology at large.

This article first appeared in CFO Insight on 2/7/13.

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